Insurance companies Baloise expects a charge of 100 million from refocusing

The Baloise insurance group believes it is on track with its refocusing strategy. For the current financial year, this will initially have a negative impact of around CHF 100 million on the annual result.

The first milestones of the strategy are already being implemented, the Basel-based insurance group announced on Wednesday. The sale of the portfolio of the German digital insurer Friday announced in October will have a negative effect of CHF 75 million on the annual profit, in addition to charges of CHF 25 million from write-downs from ecosystem initiatives.

However, Baloise does not expect any further substantial negative effects on earnings for 2025 and beyond. At an investor day in September, the insurer presented its new strategy with a focus on profitable segments of its core insurance business and set itself new financial targets.

Business volume kept tight

In the first nine months of the current year, Baloise's business volume fell by 0.7 percent to CHF 6.89 billion. In local currencies, however, there was a small increase of 0.3 percent. In addition to Switzerland, the insurance group also counts Germany, Luxembourg and Belgium among its core markets. The volume of business was slightly below analysts' average expectations.

Baloise made gains in the non-life business. The premium volume there rose by 1.7 percent to CHF 3.43 billion in the first nine months. Adjusted for currency effects, the increase amounted to 2.9 percent. The fact that growth slowed somewhat towards the end of the first half of the year is due to an accounting effect, according to the statement.

In life insurance, the premium volume fell by 4.2% (currency-adjusted -3.5%) to CHF 2.75 billion. The continuing trend towards semi-autonomous products is still noticeable here, as well as a continued restrictive underwriting policy, according to the report.

Improved EBIT in the life business

Baloise made further gains in the investment products business. Investment-type premiums rose to CHF 715 million (+1.8%; +3.7% at constant exchange rates), mainly thanks to a new product launch in Belgium.

The insurer sees the operating profit in the life business "well on track" after nine months. Baloise now expects this segment to contribute a result of "well over CHF 200 million" (2023: CHF 178.5 million).

Capitalization remains solid. As at the end of September, the SST ratio was "in the region of 210 per cent" and thus at a similar level to the end of June. Overall, Baloise now expects a cash inflow of CHF 550 million, compared with an expected CHF 500 million in September.

Baloise is also considering a share buyback of "at least CHF 100 million" next year. This is still dependent on the actual cash generation at the end of the financial year and the dividend decision at the next Annual General Meeting.

SDA